Quincy mayor Koch ready to cut ties with Street-Works

Quincy Mayor Thomas Koch says the city is prepared to break ties with its development partner in the $1.6 billion downtown redevelopment project, a potentially huge shakeup in the city's quest for a new city center.

QUINCY – Mayor Thomas Koch says the city is prepared to cut ties with its development partner in the $1.6 billion downtown redevelopment project, a potentially huge shakeup in the city's quest for a new Quincy Center.

During Tuesday's city council meeting, Koch said Street-Works Development didn't file permitting plans and financial reports that were due this past fall, and as a result failed to comply with the land disposition agreement it signed with the city in 2010. The mayor said the New York-based developer has been notified that it has 30 days, starting today, to comply with the agreement or their deal is over.

"They have not met their benchmarks. They are in default," Koch said.

Koch said Merchants Row, the now-stalled first phase of redevelopment, will move forward as a private project under the leadership of investment firm Quincy Mutual Fire Insurance. And he said the rest of the downtown plan, originally projected to bring 3.5 million square feet of new residential, retail, office, entertainment and educational space to downtown Quincy by 2020, will go forward, but perhaps with a new developer.

"Maybe the dinner guests change, but the table is set," Koch said. "And I believe we're going to be moving forward – with Street-Works or perhaps without Street-Works – in redeveloping our downtown."

Street-Works has been involved in the downtown project for nearly a decade. As a sign of its commitment to the project, the firm purchased the Granite Trust Building at 1400 Hancock St. in December 2011 and opened offices in the historical downtown building.

However, questions about Street-Works' credibility cropped up in recent months when the company was hit with multiple breach-of-contract lawsuits and when Merchants Row construction came to a screeching halt.

A representative from Street-Works could not be reached for comment Tuesday.

Now that the deal between Street-Works and the city – once heralded as an innovative public-private partnership – is in jeopardy, more uncertainty swirls around Quincy's dream for a new downtown. There's a gaping excavation hole off Chestnut Street, a sign of an incomplete project that has left businesses and residents wondering when work will resume.

Koch said the city has already made significant strides toward a new downtown, chiefly with the opening of the Hannon Parkway concourse and the Town Brook relocation, adding that residents will see new residential and retail buildings going up starting with Quincy Mutual's Merchants Row.

"We've made tremendous progress, and I underscore that," Koch said. "Although there aren't those visible buildings going up quite yet, there's an incredible amount of infrastructure that we've accomplished together which now allows that to happen."

Koch's announcement Tuesday came a few days after James Moran, executive vice president of Quincy Mutual Fire Insurance, said Street-Works would no longer be developing Merchants Row because it failed to design a plan that investors could back. Merchants Row is a block that consists of Chestnut Street, Cottage Avenue the 1400 block of Hancock Street.

Page 2 of 2 - Moran said a New York-based firm, Twining Properties, will take over the development of Merchants Row, with construction likely to pick up in the spring of 2015. The block will no longer be part of the public-private redevelopment deal, but Moran said Quincy Mutual plans to invest in the city's future redevelopment plans.

"As a result of Mayor Tom Koch's dedication to moving this forward, Quincy Mutual is very confident that ultimately we will see a beautiful transformation of the downtown center," Moran said.

Koch said Street-Works is on notice of default because it failed to submit permitting plans and financial reports for the next phase of the project by Nov. 24 of last year, a deadline set by the land disposition agreement. Street-Works had paid $500,000 to extend the deadline for the filings over the past two years, but Koch said the developer's November deadline expired without a new extension payment.

Koch assured the council and the general public that no money from city taxpayers has been used to finance the downtown project, saying the bulk of funding has come from Street-Works, private investors and state and federal grants.

However, in 2007, under former Mayor William Phelan, the city secured a $30 million loan from the state to make infrastructure improvements to kick-start the downtown project. Koch said that money went toward land purchases for the completion of Hannon Parkway and other planning expenses.

Koch said the $30 million bond will eventually be paid back using new tax revenue he expects will be generated by a redeveloped downtown.